A cryptocurrency exchange is a service where mining farm owners create mutually beneficial conditions. It is a place where virtual coins can be bought, sold, and exchanged profitably

As altcoins grow in number, many people feel the need for such intermediaries, which leads to the creation of modern technology centers where transactions will be conducted.

Currently, the number of such centers is so large that a person with electronic savings may wonder which one is the best. To get an idea, let’s look at this phenomenon from different angles.

Rules of operation of cryptocurrency exchanges

Today, the crypto market has a large number of trading platforms, more than three hundred of them. But since they are all similar to each other, and there is no particular difference in them, there is one feature that distinguishes them – each platform has its own terms and conditions.

As soon as you enter the exchange, you will be able to exchange network currencies from one type to another, sell them for regular banknotes or electronic currency, or do the opposite.

There is a possibility that there may not be a pair for the currency you are interested in, so you need to check its availability in advance to avoid problems. For example, if you want to exchange bitcoin for cardano (ADA), you need to find out before making the exchange that the platform has the ability to make the exchange.

If it turns out that the pair you need is not available, you will not be able to carry out the transaction. This also applies to regular (paper) currency.

It is not that difficult to work with exchanges. To do this, you need to perform a series of actions:

Registration: Everyone knows the procedure, and no one will have any difficulties with it.

Deposit funds to your account on the stock exchange. This is necessary for the future flexible distribution of your finances. Most often, there is no surcharge for depositing cryptocurrency, as is sometimes the case with fiat. But each has its own interest rate, which can range from 1% to 8%. The way you choose to deposit also matters, it can lead to an increase in fees due to payment systems that want to take their percentage.

Creating a request for currency transactions. This moment is the most interesting, as the bidder sets the price and waits for a potential buyer. The most important thing here is not to miscalculate the cost, as there may simply be no people who are interested in the transaction, or the buyer’s wait may be very long. It can also take a long time to wait if the cryptocurrency is not very popular.

After both parties have made a purchase and a sale, the proceeds can be kept on the exchange wallet to continue trading or transferred to your main account. If you do not plan to trade in the near future, you should not leave your savings there. There are reasons for this: there are cases when user accounts are hacked, there is a risk of the exchange collapsing, or it can simply block your account.

When choosing a crypto exchange website, pay attention to its rating (the number of reviews on the site and feedback). Since all exchanges earn their income from commissions, it is in their best interest to attract more and more new users.

The wider the customer base, the higher the user trust, as it means that the platform strictly adheres to the rules and conditions of the contract. In addition, after raising high capital, the trading platform has a chance to increase the number of cryptocurrencies and regular banknotes to form new pairs.

Visitors to crypto exchanges

Since the exchange is a platform for cryptocurrency trading and a good source of income for intermediaries, many experienced and not-so-experienced users use the difference in rates to their advantage – as they wish. Here you can meet both large entrepreneurs with large-scale cryptocurrency production from their own mining farms and small fish, up to small investors, mining owners, traders, and ordinary visitors interested in the situation on the mining market. Cryptocurrency exchanges as a resource are used not only by large investors who deal with large-scale transactions, but also by ordinary people who use the exchange as an exchanger.

For comparison, the volatility of a cryptocurrency exchange is higher than that of a stock exchange, which makes it more profitable.

Alternatively, playing on currency fluctuations in the traditional stock market – even a 10% share gained in a year – is considered lucky. But at the same time, cryptocurrency fluctuations can overtake a trader by 20% within one day. Of course, the main pitfall here is not stability. But if it were not for it, the “game” would lose its meaning, because each participant would have millions, but in today’s realities, the one with the best developed sense, luck, and, of course, understanding of all the nuances and subtleties associated with the foreign exchange market’s commerce wins.

Another unifying factor between the two exchanges (stock and cryptocurrency) is the choice: to work with one, the other, or all of them at once. What prevents you from earning additional income by capitalizing on the difference in rates of the same currencies on different sources?

Players on the exchanges can be divided into 2 types: gamblers and rational, and while stock exchange fans like to play big, losing once in a while, miners choose the path of calm and balance – according to the principle “the quieter you go, the further you will go” – slowly getting rich by exchanging less popular coins for those with higher profitability. And, of course, while we’re on the subject, “gourmets” prefer ether and bitcoin.

Owners of mining devices repeatedly face two problems: 1 – the problem of mining profitable popular currencies, as the complexity of mining bitcoin is growing every day; 2 – the difficulty of attaching less popular currencies that are easy to mine. The solution was found – to mine simple coins, exchanging them for those that are in greater demand and easier to convert into fiat, because, unlike ZEC, ether or bitcoin can easily find a use.

There are several ways to use virtual coins. In addition to exchanging cryptocurrencies for paper money, they can also be converted into non-cash, or exchanged for more reliable digital coins, for which the exchange is the best service. In addition to exchanging money, virtual coins can become a full-fledged currency that pays for labor, goods, services, and now, having it in hand, you can easily turn it into capital, and in this case, the exchange is the best place to exchange.

Investors are the most observant and passive in this rating “game”. They are not in a hurry to act, but slowly and carefully analyze the market situation, preparing to make a “jump” to buy up large quantities of the currency they need at the most appropriate time.

Features of cryptocurrency exchanges

Officially registered crypto exchanges operate and have a similar principle of operation, but since each exchange is interested in more users, they will try to offer users something special and unique.

If you look at everything in more detail, you will notice a difference in the following details:

Personal data of users. On some platforms, it is enough to indicate your email address, while on others you will have to confirm your identity with copies of documents: Driver’s license, passport, etc.

A protective system during authorization. Logging in with a username and password is the most elementary thing. But some require you to go through more than one stage for confirmation.

Variety in the choice of currencies. Sometimes platforms specialize only in currencies that are popular and have a high price, but it will not be difficult to find an exchange with a diverse range of virtual money to pair with.

Capital withdrawal. This point is similar to the previous one: some exchanges allow withdrawing only ether, bitcoin, litecoin, and other similar cryptocurrencies. Other exchanges have almost no such restrictions.

The ability to work with ordinary banknotes. In addition to cryptocurrencies, it is possible to deposit and withdraw fiat money.

Transaction when depositing/withdrawing cash. There are exchanges that make this procedure possible with the help of payment systems. Other platforms allow you to use bank transfers via cards or from one account to another.

Commission per trade. Each exchange has its own commission after each trade. Sometimes the commission is paid only by the buyer, and sometimes by the seller, but you can also find other options for commissions

Trade volumes. Large exchanges can realize up to $2 billion, while on small exchanges these figures do not exceed $15,000.

To attract new users, cryptocurrency exchanges can offer various bonuses.

Necessary trading tools, for example, high-fidelity charts with illustrations of Fibo levels.
There is a possibility of margin investing and trading.
Affiliate programs and additional payments from them.
Attractive interest rates on deposits.
The ability to install an application on a smartphone is a necessary feature in the modern world.
Crypto exchanges in the native language are not uncommon, but not everyone has the opportunity to set their language.
A quick response from technical support is an important component of any exchange. These services exist on all sites, but the professional quality is sometimes unsatisfactory.

Choosing a cryptocurrency exchange in 2020

Each person determines for himself or herself what he or she needs an exchange for: trading cryptocurrencies, exchanging funds quickly, withdrawing them, or for other reasons.

What traders are most interested in:

The range of currency pairs.
Tools and high-precision charts for productive trading.
A high level of personal and account security, as part of the finances will be constantly present on the exchange account.

What the investor studies:

The range of currency pairs.
Convenience of the verification process.
The degree of surcharges for depositing and withdrawing funds. The allowable limit for cash withdrawals.
If the permissible withdrawal amount is less than the required amount, the commission when dividing it into parts may result in losses.
There are no complications when withdrawing large amounts.

Investors don’t prioritize how well an account is protected because they don’t keep their money on the site.

An ordinary user is likely to be interested in this:

The speed of withdrawing funds from the exchange.
Whether there are deviations in the terms for depositing and withdrawing funds.
The number of currency pairs, but preferably those with which the procedures will be carried out.
No lengthy inspections requiring the provision of identity documents.

Those who mine cryptocurrencies are also interested in these issues, because during regular currency procedures, it will be appropriate to provide documents confirming the identity of the user, and an important point will be to check the security of the exchange in case of hacker attacks.

When looking for the best resource for you, pay attention to the scale of trading and the number of participants. The activity of the exchange inspires more confidence than the high guarantees and privileges that the owners of the platforms like to talk about.

It is also worth noting that platforms with a high number of currency pairs and withdrawal methods often have a long wait for the procedure to be completed. Such malfunctions can be explained by the high activity of users who want to exchange or sell a currency that is not very popular. It is also possible that this may be caused by fraudsters trying to deceive their victims in this way.

Rating of the best crypto exchanges in 2020

Which cryptocurrency exchange is the best? It’s impossible to answer this question precisely, as each person values different qualities of a platform. But there are some that can be called the golden mean, which you can choose.

Binance exchange

Binance is one of the most popular and sought-after exchanges, even though the platform does not work with paper currency. However, as the trading schedule shows, the figure can reach $4 billion per day, and the variety of pairs – more than 200 – can give you unlimited freedom of choice.

This exchange is preferred by residents of the CIS countries, and the ability to choose a language (even Ukrainian) gives this platform a plus. There is no mandatory confirmation of personal data, unless you plan to withdraw a couple of bitcoins every day.

The platform also has a rich toolkit, a pleasant and user-friendly interface, its own app for smartphones, and a transaction fee of only 0.1%.

The official website of Binance Exchange: https://www.binance.com/

Coinbase exchange

Coinbase is located in San Francisco, and at the same time, it combines two important qualities: it exists not only as an exchange but also as a crypto wallet. Frequent visitors to this platform are users with large capital. It is also worth noting that this exchange has been repeatedly featured in such major publications as Bloomberg, Time, The New-York Times, etc.

Not so long ago, in addition to online support, a hotline appeared on the site. This line is intended for those users who need help passing verification, finding out if there is a possibility to increase their limit if they suspect that their account has been hacked. This exchange deals only with three leading coins: bitcoin, litecoin, and ether.

The exchange has a referral system, deposit insurance, and a mobile wallet. This platform has its disadvantages: waiting for a response from technical support can be long, the verification procedure can be difficult, and the main disadvantage of Coinbase is that it does not work with all countries.

Official website of Coinbase exchange: coinbase.com

Bitfinex exchange

Bitfinex platform – the assortment includes 65 pairs, as well as the ability to withdraw 26 types of currencies. This exchange is one of the most popular, with a choice of Russian language and a daily trading turnover of $2.7 billion. An email will suffice to use most of the site’s procedures, and those who plan to withdraw currency in the future will have to undergo full verification. In 2016, Bitfinex’s reputation was damaged when it was hacked. The company learned its lesson, and now the level of protection has increased many times over.

Official website of Bitfinex exchange: bitfinex.com

GDax exchange

The GDax platform can reach a trading volume of up to $2 billion. Although it is one of the most popular, its range of pairs is small, with only 9, and only litecoin, ether, and bitcoin can be withdrawn from the exchange.

GDax official website: gdax.com

Bittrex exchange

At the beginning of 2017, Bittrex could offer users 276 pairs, which influenced the attraction of new participants, and thanks to their growth, the level of trading per day increased to $1 billion. In order to withdraw your funds, you will need to go through the verification procedure of your account. Some exchange users sometimes express their dissatisfaction with the difficulties of withdrawing funds.

The company introduced an updated website design in 2018, and now it looks like this:

Official website of the Bittrex exchange: bittrex.com

BitStamp exchange

BitStamp is a platform for English-speaking users, where $350 million worth of trades are made per day. This exchange is perfect for those who want to exchange such popular types of currencies as litecoin, ether, ripple, and bitcoin.The official website of the BitStamp exchange is bitstamp.net

EXMO exchange

The EXMO platform is often used by residents of the CIS countries. Daily trading volumes can reach $75 million, and the range of pairs includes 45 units and 13 currencies from different countries, such as the dollar, euro, hryvnia, Polish gold, and ruble.

Official website of the EXMO exchange: exmo.com

Kraken exchange

The Kraken platform boasts $240 million in daily trading, a range of 47 pairs, and 17 international currencies. The exchange offers margin trading and has an app for smartphones. The disadvantage of this platform is that sometimes there may be problems with withdrawing funds: kraken.com

Poloniex exchange

The Poloniex platform offers a range of 99 pairs and the ability to withdraw 68 different currencies. The platform is equipped with an intuitive interface and a high level of account security. This exchange attracts users because it offers margin financing and trading. In 2017, the popularity of the resource began to decline, as there were frequent malfunctions in its operation, and it took a long time to get a response from the support service. There were also cases of unreasonable freezing of accounts of different users.

Official website of the Poloniex exchange: https://poloniex.com/

Cex.io exchange

The exchange is mostly populated by Russian-speaking users. It has a large turnover of funds, the record mark of which was $50,000,000 in 24 hours. However, the range of trading on the exchange itself is not yet very wide – 22 pairs, but the withdrawal is available in 8 different currencies. The advantage of this exchange is that no commission is charged when depositing an account with a bank card, thanks to the affiliate program. This works because every time you exchange currencies, 30% of the exchange fee goes to the “fund” of the deposit fee. Cex.io’s disadvantage is slow verification, and there have been situations where accounts have been frozen.

Official website: cex.io

Yobit exchange

This exchange has about 3926 exchange pairs, and this number is the leading one among all possible currency exchange services, but unfortunately, this is where Yobit’s advantages end. Negative comments about this exchange do not make it a positive advertisement, which is why serious businessmen rarely visit it, and large transactions are rare. In addition, users complain about unfair account freezing or even complete account blocking. In addition to these problems, there are plenty of others, but the reaction of technical support to them is passive.

Official website: yobit.net/ru

Livecoin exchange

Livecoin has faced similar situations, including blocked accounts, frozen savings, problems with transfers, and a sluggish response from the exchange’s administration to user complaints. And even a large number of pairs – 365 and a variety of currencies – 177 – do not save the situation.

Official website of the exchange: livecoin.net

However, the rating is not the most constant indicator, and there is a high probability of its change. To achieve the highest profitability when participating in exchange games in the cryptocurrency market, pay attention to the little things based on user reviews and other facts that can decide the situation of the market as a whole, affecting each individual user.

Rating of the most popular cryptocurrency exchanges in 2020